WPP Q1 Group Revenue Rises 8.3%

(RTTNews) - UK-based advertising giant WPP Group plc (WPP.L, WPPGY) said Thursday its group revenue for the first quarter grew 8.3 percent from last year. In constant currency, revenue improved 7.4 percent, with particularly strong performance in the U.S. and the U.K.

On a constant currency basis, first-quarter revenue, net sales, profit and operating margins were above target, and ahead of last year.

The owner of the Young & Rubicam, Ogilvy & Mather and Grey Group agencies reported that total group revenues for the quarter grew 8.3 percent to 2.78 billion pounds from 2.57 billion pounds in the same quarter last year.

In constant currency, revenues were up 7.4 percent and like-for-like revenues advanced 5.2 percent. The company reported like-for-like revenue growth in all regions and business sectors, except data investment management.

Total revenues in U.S. dollars were down 1.1 percent to $4.21 billion, while it was up 20.9 percent to 3.75 billion in euros reflecting volatile exchange rates.

Total group net sales for the quarter grew 6.0 percent to 2.42 billion pounds from 2.28 billion pounds last year. It was down 3.2 percent in U.S. dollars and up 18.3 percent in euros.

Constant currency net sales were up 5.0 percent, and like-for-like net sales rose 2.5 percent.

The company noted that the pattern of net sales growth in 2015 has started similarly to the final quarter of 2014, with both constant currency and like-for-like growth showing continuing improvement across all geographies and sectors, including data investment management.

Net sales in North America grew 10.7 percent or 1.8 percent in constant currency, to 915 million pounds, with like-for-like growth of 2.1 percent.

Net sales in the U.K improved 10.5 percent to 350 million pounds, with like-for-like growth of 3.6 percent, the second strongest region in the first quarter.

Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe, was the strongest region in the first quarter, with constant currency net sales growth of 9.1 percent and like-for-like growth 4.0 percent.

Net new business was about $1.0 billion in the first quarter, compared with $1.275 billion in the year-ago quarter.

At constant currency, Advertising and media investment management net sales increased 5.7 percent and Data Investment Management net sales were up 1.6 percent.

Public Relations and Public Affairs saw a 1.6 percent growth as well as Branding and Identity, Healthcare and Specialist Communications witnessed a 7.0 percent increase.

Looking ahead, the company said early indications are that full-year like-for-like revenue and net sales growth will be up over 3 percent, with a stronger second half, partly the result of easier comparatives.

The company is also targeting gross margin or net sales margin improvement of 0.3 margin points excluding the impact of currency.

For the long-term, WPP expects improvement in net sales margin of 0.3 margin points or more, excluding the impact of currency, depending on net sales growth and staff cost to net sales ratio improvement of 0.2 margin points or more.

The company also sees annual headline earnings per share growth of 10 to 15 percent per year delivered through revenue growth, margin expansion, acquisitions and share buy-backs.

In Thursday's regular trading session on the LSE, WPP.L is currently trading at 1,560.00 pence, down 36.00 pence or 2.26% on a volume of 0.93 million shares.